‘Cabo’ brings Exelixis near market, after 18 years

Exelixis Inc. believes it can finally see its future, and it’s in cabo.

Cabonzantinib, a cancer drug that potentially could target multiple forms of the deadly disease as well as tumor-related bone pain, was submitted last month for Food and Drug Administration approval for a form of thyroid cancer. The treatment, known as “cabo” for short, takes South San Francisco-based Exelixis the closest to selling a drug after 18 years and a cumulative deficit of $1.1 billion.

That new-drug filing is validation for the one-time fruit-fly research company that over the past three years shuttered its early research operations on the way to shedding 600 jobs. But CEO Michael Morrissey has Exelixis’ sights set on potentially more lucrative targets for cabo: prostate cancer and other tumors.

“It’s all cabo, all the time,” Morrissey said.

Prostate cancer is the most common cancer in men, with more than 200,000 diagnoses and 28,000 deaths annually. Those numbers have attracted San Francisco’s Medivation Inc., which submitted enzalutamide for approval in May, and Johnson & Johnson, which won approval last August.

Cabo, which Bristol-Myers Squibb returned to Exelixis two years ago so the drug giant could focus on its internal pipeline, could stand out for a couple of reasons. First, it blocks two ways that tumors grow and spread. Also, mid-stage trials show the drug can shrink bone lesions — in some cases resolving the lesions completely — and reduce cancer-related pain, which has allowed some patients to dial back their pain medications.

Various cancers metastasize to the bone and lead to some level of pain, Morrissey said, but that happens particularly in prostate cancer.

Exelixis is running two Phase III trials in men with prostate cancer that has spread to other parts of the body. Those trials, enrolling 1,200 men total, could produce data on overall survival and pain reduction in the first half of 2014. Exelixis is also exploring cabo’s use in kidney, breast, liver, skin and non-small cell lung cancers. The FDA could act on its medullary thyroid cancer application early next year.

“There are lots of one-compound companies, but they’re usually one compound, one indication,” said Morrissey, Exelixis’ longtime research leader who took over as CEO in June 2010. “Cabo is one compound, multiple indications.”

In fact, cabo has shown activity in 12 of 13 tumor types in which it has been tested, Morrissey said.

“We cast a very wide net,” he said. “You don’t often know what you’re going to catch when you go fishing.”

Cabo has been evaluated in more than 1,500 patients, Morrissey said.

But where Medivation’s stock has soared more than 400 percent into the $90-per-share level since Nov. 2, Exelixis shares in that same time have climbed a relatively modest 25 percent to around $5.50. Some investors feel the company is focusing cabo too late in the prostate cancer timeline, where there are fewer patients. That could translate into fewer cabo sales.

“Our view is to take a measured approach that measures the risk, gives us a foothold in the indication and a chance to look at larger opportunities in prostate cancer that make sense from the clinical data, marketplace and commercial opportunities,” Morrissey said.

Also, some Exelixis watchers say that the company eventually will need more men in its prostate cancer trials, which could add months to getting results from those studies.

“If we’re successful in the two (trials) and show that ability to improve survival, decrease pain and decrease narcotics, ... that would allow us to move forward in a competitive area,” Morrissey said.

Even now, Exelixis is pushing forward with its clinical trials, thanks in part to a wallet fattened by a series of partnership deals over the past decade and savvy cost saving in the new age of biotech austerity. It signed a collaboration deal late last year with the National Cancer Institute in which the agency will undertake 12 clinical trials of cabo; Exelixis will pay $20,000 per study per year.

Exelixis, now with 175 employees from more than 700 in 2009, has cash, equivalents and securities totaling about $240 million.

“The business model and evolution continues to make sense. We’ve got a great team ... who (is) motivated with urgency and focus and buy-in,” Morrissey said. “We all buy into the vision. Now it’s about execution.”